The appropriate standard of review to be applied in investor-state arbitration—as well as in other dispute settlement contexts, for that matter—remains a recurrent and much debated topic.[1] The reason is straightforward: In many cases, the outcome of arbitral proceedings hinges, inter alia, on the intensity with which a tribunal scrutinizes the conduct of the investment’s […]
Debates about investment treaties often raise questions about fairness and independence in international investment arbitration. Some observers argue that investment arbitration offers a neutral and impartial forum in which to resolve investor-state disputes as a basis for protecting foreign-owned assets and ensuring the rule of law.[1] Others claim that the arbitration mechanism favours investors and […]
In January 2012, the Bolivarian Republic of Venezuela denounced the ICSID Convention,[1] becoming the third country – after Bolivia and Ecuador – to do so. The exit from the global forum for the settlement of investment disputes signals these countries’ apparent loss of faith in the system and raises questions about the Convention’s fitness for […]
In November 2011, an arbitral tribunal found the Republic of India guilty of violating the India-Australia bilateral investment treaty (BIT). It is the first known investment-treaty ruling against India, despite the fact that the country has a mammoth portfolio of BITs with more than 70 countries. News of the award broke only in February 2012.[i] […]
A dispute will only fall within the jurisdiction of the International Centre for Settlement of Investment Disputes (ICSID) if it directly arises out of an ‘investment’, as is provided by Article 25(1) of the Convention for the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention). However, not only does the ICSID Convention fail to provide any definition of what constitutes an ‘investment’, the drafters of the ICSID Convention, in fact, made an express decision not to include such a definition. This absence has given rise to interesting issues of interpretation as ICSID tribunals have sought to arrive at an understanding of how the term ‘investment’ should be properly understood for the purposes of the ICSID Convention.
As members of the Eurozone are now acutely aware, the lack of a sovereign debt restructuring regime is one of the most glaring gaps in the international financial architecture. That said, this summer’s decision by a tribunal of the International Centre for Settlement of Investment Disputes (ICSID), which grants a bilateral investment treaty (BIT) jurisdiction […]
Advocates for the Trans-Pacific Partnership Agreement (TPPA) describe it as a “new generation agreement for the 21st century” that will go further behind the border than any previous free trade agreement (FTA). This signals significant changes in the investment regime found in the current generation of FTAs and bilateral investment treaties (BITs). Precisely what those […]
Five years ago, some Latin American countries started a critical movement against the International Centre for Settlement of Investment Disputes (ICSID), the World Bank institution for arbitrating disputes between foreign investors and host states. They perceived that ICSID arbitration proceedings had become problematic due to a lack of transparency and a failure to address the […]
It is an established fact that many transnational companies choose the jurisdiction of the Netherlands as a base for their global trade and investment operations, at least partly because of the country’s favourable tax regime that facilitates corporate tax avoidance strategies.[1] A new report by the Centre for Research on Multinational Corporations (SOMO) entitled “Dutch […]
Over the past two decades, stabilization provisions in investment contracts (and in the domestic law in some developing countries) became a popular demand of investors into developing countries. Rarely used and largely unconstitutional in most developed countries,[1] these provisions essentially limit the ability of governments to have new laws and regulations apply to a foreign […]
The UN shines a spotlight on business and human rights In July 2005, the then United Nations Secretary-General Kofi Annan appointed John Ruggie as his Special Representative on Business and Human Rights. Ban Ki-Moon continued the appointment, and this June Ruggie delivered his final report to the Human Rights Council. Ruggie’s mandate is highly significant […]
The public began to hunger for information about investment in the agriculture sector when a massive wave of foreign investment in farmland and water was triggered, in 2008, by a confluence of the biofuels boom, global food crisis, sharp spike in oil prices and the financial crisis. Alarming information started to emerge in the media. […]
In recent years, economic liberalisation, improved transport and communication systems, and the global demand for energy, minerals and agricultural commodities have fostered investment in agriculture, mining and petroleum projects in many poorer countries. For some commentators, this trend provides new opportunities to promote growth, generate public revenues and create employment in countries that have limited […]
The oil and gas industry faces increasingly strict environmental standards in developed countries. However, the majority of the world’s proven oil reserves are in developing countries and economies in transition, which often lack sophisticated regimes for environmental protection. Even when legislative frameworks are well developed, there are often deficiencies in capacity and an unwillingness to […]
In April of this year, as a part of a broader rethink of Australia’s approach to international trade negotiations, the Gillard Government vowed that it will no longer include provisions on investor-state dispute settlement (ISDS) in bilateral and regional trade agreements.[1] The new policy is justified by reference to the principles of ‘no greater rights’ […]
Two international projects relating to foreign investment and sustainable development (SD) were completed in the past two months. These two projects individually and together show the emerging pathways to properly considering the linkages between new investments and SD in the host state and community. The first of these projects to be launched, on 4 April […]
For nearly two decades, the tobacco industry has used international investment rules to challenge governmentrestrictions on cigarette marketing. In 1994, R.J. Reynolds Tobacco Company threatened to bring a claim under the North American Free Trade Agreement’s (NAFTA) investment chapter as part of its successful lobbying campaign against Canada’s proposed “plain packaging” legislation, which would have […]
With the seventh round of negotiations between Canada and the European Union over the Canada-EU Comprehensive Economic and Trade Agreement (CETA) completed this April, and the eighth round scheduled for July, the involved nations are closer than ever to being subject to the investment arbitration provisions of another free trade agreement. Canadian critics of CETA […]
While the concepts of sovereignty, human rights, the environment and the rule of law are often invoked in public debate about international investment treaties (IITs), there is relatively little discussion of the economic effects of such treaties.[1] One of the most powerful legal protections provided by IITs is the protection of foreign investor’s ‘legitimate expectations’ under fair and equitable treatment (FET) provisions, which are common to most IITs. This article draws on economic theory—specifically, the notion of moral hazard—to elucidate some of the problems with broader interpretations of the doctrine of legitimate expectations.
The last two decades have witnessed an exponential increase in arbitral disputes between investors and states under international investment treaties. UNCTAD reports 357 known registered cases by the end of 2009; of those, 202 cases—or 57 percent—were initiated after 2004.[1] Independent investment tribunals now regularly render binding decisions as to whether states have violated investment protection standards guaranteed under various bilateral and multilateral investment treaties—a phenomenon that has turned international investment law into one of the most dynamic fields of public international law.
This short essay discusses new evidence in the economics profession showing that capital controls are important macro-prudential measures that nations should have in their toolkit to prevent and mitigate financial crises. More importantly for this publication, it will be shown that United States trade and investment treaties do not reflect the emerging consensus on capital controls. There is a unique opportunity to rectify this problem as the United States finalizes its new model bilateral investment treaty (BIT) and moves forward on negotiations for a Trans-Pacific Partnership Agreement (TPP) with numerous Pacific Rim nations. Moreover, an opportunity for reform lies in the pending Congressional votes on Bush-era trade deals such as those with South Korea, Colombia, and Panama.
To a significant extent the site of debate about the terms of globalization and its relationship to the regulatory state has shifted from the World Trade Organization to the world of investment treaties and arbitration. Investment treaties typically confer on a foreign investor a right to sue a host state that has allegedly failed to comply with a number of substantive obligations, typical among them the requirement to compensate for expropriation, fair and equitable treatment, and national treatment.
The Republican victories in U.S. congressional elections on 2 November 2010 are widely assumed to have increased the odds that the Obama administration will proceed with new bilateral investment treaties (BITs) and free trade agreements (FTAs) containing investment chapters. But this assumption bear closer examination. The post-election situation is complex.
The 2010 World Investment Forum (WIF), held on 6-9 September 2010, in Xiamen, China, turned UNCTAD into the global gravity center for open, universal, inclusive and high-level international investment discourse and policy formation. Eight events and conferences were attended by more than 1,800 participants from 120 countries and 16 international organisations, among them nine heads of State, four heads of international organisations, 79 ministerial-level officials, and 116 senior business executives.
There has been recent interest in the use of quantitative research tools to evaluate the fairness and independence of investment arbitration. In this article, Professor Gus Van Harten critiques one of the most prominent studies to examine this question. While the study in question, “Development and Outcomes of Investment Treaty Arbitration” (2009), has been used in some policy circles to support the argument that investment arbitration functions fairly, Van Harten argues it has limitations that prevent such conclusions.
It is no longer a secret that there is a new wave of foreign investment in farmland, predominantly in Africa. An explosion of media reports and a series of studies by the World Bank, Food and Agricultural Organisation (FAO), International Fund for Agricultural Development (IFAD), United Nations Conference on Trade and Development (UNCTAD) and International Institute for Environment and Development (IIED), have confirmed the scale and consequences of this new influx of foreign investment. The World Bank report, by far the most comprehensive, found that reported deals amounted to 45 million hectares in 2009 alone.
Ignacio Torterola In October, State delegations are expected to discuss the issue of transparency in the UNCITRAL Rules of Arbitration. Ignacio Torterola, ICSID Liaison at the Argentine Embassy in Washington, DC, and Argentine Delegate to the UNCITRAL Working Group II, explains why greater openness would benefit the investment arbitration system. Some preliminary considerations Working Group […]
Ramon Torrent The Lisbon Treaty broadens European commercial policy in what marks the latest milestone in a long (and unfinished) journey in which the EC/EU has sought to extend its exclusive competence over the entire area of external economic relations. Towards this goal, the European Commission has always led the course, albeit with limited success. […]
The Lisbon Treaty has shifted the competence related to Foreign Direct Investments (FDI) from the European Union Member States to the Union and has added it to the Union’s exclusive common commercial policy. This transfer of competence not only requires the development of a common EU investment policy, but also legislative steps to clarify the status of the 1200 existing Bilateral Investment Treaties (BITs) of the EU Member States and their ongoing BIT negotiations. This offers a unique opportunity for an assessment of the existing BITs and for an open and broad discussion on the future European international investment policy.
With the EU’s Lisbon Treaty granting the European Union competence over Foreign Direct Investment, the European Commission released two documents in July that help chart the way forward: a draft regulation on how to deal with existing Bilateral Investment Treaties (BITs) of the EU Member States over the next five years, and a Communication that […]
By Elizabeth Whitsitt and Damon Vis-Dunbar30 November 2008 In 1991, Brazil began one of the world’s largest privatization programs, selling more than US$100 billion worth of assets. Seventeen years later and with a Gross Domestic Product (GDP) that ranks tenth in the world, Brazil is an industrial power that, according to the World Bank, is […]
1 October 2008 Professor John Ruggie was appointed to be Special Representative of the United Nations Secretary-General on business & human rights in 2005. Prof. Ruggie is also the Kirkpatrick Professor of International Affairs and Weil Director of the Sharmin and Bijan Mossavar Rahmani Center for Business and Government, as well as Affiliated Professor in […]